Microsoft reduced its Xbox division workforce by 268 positions on September 22, 2026. The layoffs primarily impacted Halo Studios and central operations. This action is part of a broader restructuring plan announced in July 2026 by CEO Asha Sharma, which targets 3,200 job cuts, representing 20% of the division's staff. With this latest round, 75% of the planned reductions are complete.
The company transferred development of the next mainline Halo game to Activision. While the new team will operate independently from the Call of Duty pipeline, the remaining Halo Studios staff will continue to support current titles, including Halo: Campaign Evolved. Since the $69 billion acquisition of Activision Blizzard in 2023, Microsoft has cut approximately 44,000 jobs.
The reorganization includes shifting Rare and World’s Edge under Activision’s management. Additionally, Obsidian will move to Bethesda, and Playground Games will merge with Turn 10 Studios. Matt Booty, Chief Content Officer at Xbox, stated that the changes aim to create fewer business units with more specialized publishing expertise.
